Baosteel 1Q profit drops 98%

China’s top steelmaker, Baoshan Iron and Steel (Baosteel), saw its net profit drop by 97.7% to US$13 million in the first quarter, as global demand weakened for products from cars to industrial machinery, Reuters reported. The return fell well short of analysts’ profit projections, which averaged at US$51.3 million. Baosteel said it expected net profit in the first half of 2009 would also fall sharply from a year earlier as the steel market had yet to rebound. It added that government efforts to support the steel industry would take time to have an effect. The China Iron and Steel Association has said virtually all of the country’s steelmakers were loss-making or earned only a small profit in the first quarter, as oversupply in the country pushed down prices.